Ministry Moves To Amend Steel Order

The Union ministry for steel and mines has mounted an initiative for the amendment of the Iron & Steel (Control) Order, 1956, with a view to making it more conducive to the free market economy. The ministry initiative follows a proposal by the Department of Consumer Affairs to review the Steel Control Order, 1956.

Earlier this year, the Department of Consumer Affairs had convened a special meeting to review various control orders pertaining to commodities listed under the Essential Commodities Act, 1955.

The steel ministry's move has also been prompted by a demand by a section of Mumbai-based traders seeking the abolition of the order on the grounds that it has become obsolete in the context of a free market economy.

 

Senior steel ministry officials said while the abolition of the order is out of question, the ministry has conceded that several modifications are required to make the order more market-friendly.

Officials said the ministry had commissioned the Development Commissioner of Iron and Steel (DCI&S) to draft a charter of recommendations for amending the order. The DCI&S submitted its suggestions to the ministry in October 1998. The steel ministry is yet to take up the matter with the centre.

Some of the key proposed amendments/additions are as follows:

Introduction of quality-control and promotional measures on the lines of those in the cement, textiles and oilseeds sectors. In a liberalised regime, the regulatory mechanism must have ready access to information on both specification and cost to ensure strict quality-control which is essential for sustenance in a competitive world market.

In order to check dumping of steel items by foreign agencies, a mechanism needs to be evolved to regulate cases of dumping through the empowerment of the office of DCI&S.

Minor amendments are required to facilitate the collection of information and execute action to regulate the quality of exports. This would enhance the goodwill of Indian steel in global markets.

Since availability of accurate information is essential to the effectiveness of the Iron and Steeel Control Order, a proposal has been made to the secretary, Department of Statistics, ministry of planning, programme and implementation, to delegate DCI&S appropriate powers for collection of information under the Collection of

Statistics Act, 1953.

In addition to the list of amendments, the DCI&S has also submitted a detailed explanatory note to the government on the reason for retaining the Iron & Steel Control Order. Significantly, the abolition of the order would imply that organisations like the Joint Plant Committee and the Steel Development Fund Managing Committee would have to wind up operations.

According to officials, since these organisations have an important bearing on the functioning of the steel industry, the ministry would have to devise a way of retaining these bodies before abolishing the order, if at all.

Officials further added an assessment of the control over iron and steel would reveal that barring the period of World War II the order has not been rigidly implemented.

Over the years there has been a constant review by the DCI&S of several provisions and particularly with reference to end-use declarations.

Viewed against this background, they said, the physical relaxation from enforcement of the statutory order may continue as usual, but the legal framework would not be dismantled altogether at least till 2000.